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Chancellor Jeremy Hunt has said the government will crack down on banks blacklisting customers who hold controversial views after Brexit leader Nigel Farage claimed his UK bank account had been closed without explanation.
Hunt has called on City Minister Andrew Griffith to investigate the practice of lenders closing the accounts of people or businesses whose views they disagree with.
“Banks and payment providers occupy a privileged place in society and it would be worrying if financial services were denied to those exercising the right to legal freedom of expression,” Griffith told the Financial Times.
The Treasury opened an inquiry into the matter earlier this year after right-wing commentator and journalist Toby Young complained that the Free Speech Union group he founded had his PayPal account frozen last September. PayPal did not immediately respond to a request for comment.
The government had to respond to the inquiry by the end of July, according to government officials. They are expected to recommend a tougher notice period if lenders want to close an account and more information on why action has been taken.
Farage, the former leader of the UK Independence Party (Ukip), has claimed he is being kicked out of the UK by a pro-Remain bank that has blocked his financial access.
Farage said on Thursday that his accounts with an unnamed “prestigious” institution were about to be closed without explanation after 20 years as a customer.
In a six-minute video posted on Twitter, Farage said he had been made to feel like a “non-person” after seven different lenders refused to let him open personal and business accounts.
“The establishment is trying to force me out of the UK by closing my bank accounts,” Farage claimed. “This is serious political persecution at the highest level of our system.”
Ministers also want to reform the monitoring regime for “politically exposed persons” (PEPs) to ensure it is not over-enforced. Politicians classified as PEPs are subject to stricter checks by banks to ensure they comply with the law.
Treasury officials said the government had included measures last week in the Financial Markets and Services Bill to require regulators to distinguish between lower-risk domestic and foreign PEPs, although those rules have not yet are in force
The government has also asked the Financial Conduct Authority to carry out a review of whether financial institutions are adhering to its guidelines on the treatment of “PEPs” and to assess the adequacy of current rules.
A banker at a major lender said most of the closures were the result of concerns such as the source of funds or abusive behavior towards staff, adding that they were limited in what they could tell clients because of the regulations against potential criminals.
The FCA has previously called out payments fintechs, which offer similar services to banks, for freezing access to customer accounts for too long without providing a adequate explanation.
Big banks were also under political pressure to raise savings rates, with the Treasury select committee sending letters on Monday asking whether they believed their products offered “fair value” to customers.
